Legendary investors such as Leon Cooperman and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those successful funds in these small-cap stocks. In the following paragraphs, we analyze VWR Corp (NASDAQ:VWR) from the perspective of those successful funds.
VWR Corp (NASDAQ:VWR) has experienced an increase in enthusiasm from smart money lately. VWR was in 26 hedge funds’ portfolios at the end of September. There were 21 hedge funds in our database with VWR holdings at the end of June. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as AMC Networks Inc (NASDAQ:AMCX), Brocade Communications Systems, Inc. (NASDAQ:BRCD), and Copa Holdings, S.A. (NYSE:CPA) to gather more data points.
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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Hedge fund activity in VWR Corp (NASDAQ:VWR)
At the end of the third quarter, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, a gain of 24% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in VWR over the last 5 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Ken Griffin’s Citadel Investment Group has the largest position in VWR Corp (NASDAQ:VWR), worth close to $36.3 million. On Citadel Investment Group’s heels is Barry Dargan of Intermede Investment Partners, with a $34.9 million position; 3.9% of its 13F portfolio is allocated to the stock. Remaining professional money managers that hold long positions encompass D E Shaw, Eli Cohen’s Crescent Park Management and Cliff Asness’ AQR Capital Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
With a general bullishness amongst the heavyweights, key hedge funds have jumped into VWR Corp (NASDAQ:VWR) headfirst. Alyeska Investment Group, led by Anand Parekh, established the most valuable position in VWR Corp (NASDAQ:VWR). Alyeska Investment Group had $20.6 million invested in the company at the end of the quarter. Benjamin A. Smith’s Laurion Capital Management also initiated a $10.1 million position during the quarter. The other funds with brand new VWR positions are Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Solomon Kumin’s Folger Hill Asset Management, and Neil Chriss’ Hutchin Hill Capital.
Let’s now review hedge fund activity in other stocks similar to VWR Corp (NASDAQ:VWR). These stocks are AMC Networks Inc (NASDAQ:AMCX), Brocade Communications Systems, Inc. (NASDAQ:BRCD), Copa Holdings, S.A. (NYSE:CPA), and PAREXEL International Corporation (NASDAQ:PRXL). This group of stocks’ market values are similar to VWR’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AMCX | 28 | 344024 | 4 |
| BRCD | 31 | 367907 | 3 |
| CPA | 16 | 246915 | 9 |
| PRXL | 19 | 302782 | 2 |
As you can see these stocks had an average of 24 hedge funds with bullish positions and the average amount invested in these stocks was $315 million. That figure was $288 million in VWR’s case. Brocade Communications Systems, Inc. (NASDAQ:BRCD) is the most popular stock in this table. On the other hand Copa Holdings, S.A. (NYSE:CPA) is the least popular one with only 16 bullish hedge fund positions. VWR Corp (NASDAQ:VWR) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard BRCD might be a better candidate to consider taking a long position in.
Disclosure: None
